Sebi Eases Paperwork for Debt Security Issuers

Sebi, India's market regulator, has granted issuers of listed non-convertible debt securities some relief from the requirement to deliver hard copies of financial documents to investors. This relaxation aligns with the Ministry of Corporate Affairs' extended exemption, ensuring issuers are compliant until September 2025.

In a recent move, the Securities and Exchange Board of India (Sebi) announced a relaxation for issuers of listed non-convertible debt securities. The regulatory body has exempted these issuers from the obligation to send physical copies of crucial financial documents to investors, aligning with a similar decree by the Ministry of Corporate Affairs.

Normally, Regulation 58(1)(b) mandates sending hard copies of financial statements to securities holders without registered email addresses. However, Sebi's new circular allows entities to forgo this requirement from October 1, 2024, to June 5, 2025, without facing penalties. This leniency is dependent on additional disclosures through public advertisements that include web links to the relevant financial documents.

The initiative follows a consultation paper released by Sebi in April and is effective immediately. The first phase of this exemption ends in 2025, with a potential for continuation based on advertisement-based disclosures. This approach aims to ensure stakeholders have efficient access to necessary financial information while simplifying compliance procedures for issuers.

(With inputs from agencies.)